Q.Which of the following transactions is included while estimating a country's Gross Domestic Product (GDP)?

GDP counts only the value of currently produced final goods and services — it does not count transfers of already-existing assets, government transfer payments, or windfall gains, since none of these involves new current production.

GDP measures the value of final goods and services currently produced within a country's domestic territory during a year. Each option must be checked against this test:

1. Sale of a second-hand car — the car was already counted in GDP in the year it was originally manufactured. Reselling it involves no new production, so it is excluded (only the dealer's/broker's margin, if any, on the resale would count, as a service).
2. Old-age pension paid by the government — this is a transfer payment: the pensioner receives income without providing any current good or service in return. Transfer payments are excluded from GDP because they do not correspond to current production.
3. Value of bread produced by a bakery during the current year — this is newly produced current output of a final good, so it is correctly included in GDP.
4. Money won in a lottery — this is a windfall gain, unrelated to any productive activity, and is excluded for the same reason as a transfer payment.
   ✓Final answer

   (c) Value of bread produced by a bakery during the current year — GDP includes only currently produced final goods and services; it excludes resale of existing assets, transfer payments and windfall gains.